Why did the inner city gentrify?

Gentrification is one of the most significant changes to occur in Australian cities over the last 50 years. It wasn’t caused by deliberate urban policy though but resulted from a complex set of deeper forces

Inner city Melbourne at dusk. The far end of Albert Park is 4.5 km from Flinders St Station. Click to see full 360 panorama (source: Lensaloft)

Earlier this month I argued that urban policy-makers didn’t single-handedly create Melbourne’s much envied laneway culture (How did Melbourne’s ‘laneway culture’ come about?). Their contribution was important but it was primarily about facilitating underlying economic and social forces.

There’s a more general point here. Most of the big changes in cities aren’t shaped by planners but by structural pressures and trends. Much of the challenge facing urban policy-makers is to understand these pressures and guide and attenuate how they work geographically.

Consider the gentrification of the inner city that started in earnest from around the 1970s in Australia and led directly to today’s stratospheric property prices. It’s instructive to think about what caused gentrification because it shows the idea that we can confidently plan urban futures over long time periods is largely a conceit. (Fn 1)

Could anyone in the 1950s or 1960s have confidently predicted the extent of gentrification of the inner areas of Australian cities? It’s hard enough to identify some of the key forces that produced the inner city revival, but the idea that policy-makers knew where it would go – or deliberately planned today’s outcome – seems very unlikely.

In the 1950s the inner suburbs of Melbourne and Sydney (defined as 5 km radius from the CBD) were relatively dense mixed-use working class suburbs with terraces, pubs and factories. Housing was relatively cheap and attracted migrants who in turn generated demand for “exotic” services like cafes.

Around this time the departure of manufacturing for the suburbs began in earnest. It was driven by a number of factors, including new ‘horizontal production’ methods, reductions in the cost of truck transport and increasing traffic congestion in the inner city.

With cheaper cars, better roads and the opening of new areas for housing, much of the inner city blue collar workforce followed manufacturing to the suburbs. So did migrants, most of whom aspired to live in larger detached houses.

The exodus of industry was crucial for gentrification – it made the inner city a much more pleasant place to live.

The rapid expansion in higher education in the 60s and 70s introduced many staff and students to the lifestyle possibilities of the nearby inner city. Rents and house prices were competitive with the suburbs, at least in the early decades of gentrification.

Later, declining household size – itself the product of upstream changes in factors such as fertility – meant small inner city dwellings provided more space per person, especially for the expanding cohort of professionals who worked in the CBD. They married later, had fewer children and hence required less space. Most terraces could in any event be renovated to function better and could be extended to some degree.

Gentrifiers were initially drawn to the inner city by the diversity of jobs it offered and later by the CBD’s increasing specialisation in high-paying Government, corporate and producer services jobs. This shift in employment geography was a consequence of higher level economic changes brought on by the transition from a goods to a services and knowledge-based economy.

Increasing female workforce participation helped to make the then-fringe suburbs, which were progressively becoming more distant from the centre, less attractive to this group and conversely made the accessible inner city, which also had the highest density of public transport routes, correspondingly more attractive. The high residential density of the centre also complemented the lifestyle of these smaller, richer and better educated households. Old buildings that formerly supported industry and a much larger population provided venues for restaurants and other lifestyle services.

These are some of the forces that came into play at different times but worked synergistically to produce gentrification. While it might seem easy to understand the broad outline of these changes in retrospect, it is hard even with the benefit of hindsight to unpick exactly how the events unfolded, what relative contribution each factor made, or how it might have worked out if some of these factors had been different or even absent. It is harder still to sort out cause and effect at the geographic level of individual suburbs. Perhaps a small difference in one factor could have produced a wildly different outcome.

Those difficulties however are trifling compared to how hard it is to identify all the relevant factors – with appropriate weightings and timings – that will shape Australian cities over the next 50 years and predict how they will combine and what outcome they will produce.

As I’ve observed before (Can outer suburbs be more adaptable for future generations?), the idea that we can go one better and deliberately create or plan some idealised future based on today’s values is ambitious to say the least. Of course some decisions have to be made today in the expectation their effects will be long-lived, e.g. transport infrastructure, but we should nevertheless focus on maximising the ability of our cities to adapt to new and unforeseen circumstances.

We should mostly shy away from the small stuff – including physical design – and focus on the big picture stuff like having flexible and efficient institutions and processes. We should focus on removing impediments and frictions to adaptability, such as hefty stamp duty on property transactions. Prices should reflect real costs rather than implicit subsidies. The cost of negative externalities should be internalised e.g. by road pricing. Our institutions should be open and accountable.

We should be aiming to have an urban system that can absorb and adapt to change. But we should be wary about privileging today’s technical understandings and political views; because there’s a good chance they’ll be wrong.

Thanks Alan for an interesting retrospective. The trend has been a lot slower here in Adelaide due to the slower rate of growth. The City centre had a population of over 40,000 in 1915, compared to 20,000 now. Of course the other pressures forcing change (traffic congestion, cost) are much lower here.

There is an interesting parallel to our inability to determine future land use with our inability to manage travel demand. Past attempts to develop suburbs with balanced residential and commercial/industrial land uses to match trip production and attraction rates have failed. Even if you managed to get the calculation right (almost impossible as labor rates change over time in different industries) it is impossible to maintain the balance. That is, if you have 500 households and 500 jobs in the one suburb, there is no guarantee the same people will live and work in the same suburb, ensuring there are still lots of trips on the road network to external destinations. Even if you could match them up exactly, over time people change jobs and change houses, so that it all breaks down again.

In land use, transport and economics, the thing in common is our inability to predict the future.

In Melbourne, the state government operates some bus services that link routes e.g. the orbital SmartBus services that connect radial rail lines. I think bus rather than rail is the most plausible way, at least in the short term, of creating the network effect c.f. Auckland.

In your other article you seem to imply that it’s largely serendipity that means inner city areas have turned out to be very adaptable to modern usage patterns. That seems to be a) a cop out and b) highly unlikely, given the same pattern has occurred across a large number of cities not just in Australia, but much of North America and even parts of Europe, whose cities have much older and more complex histories. But a couple of key things were true when these areas were first developed: a) motor vehicles didn’t exist or weren’t widely available, b) the construction techniques of the day seemed to favour durability and classic styling that didn’t date poorly. I think the issue many of us have with more recently developed suburbs is the degree to which they are dependent on the notion that everybody relies on a car to get around (which for many reasons is a dependence most of us may not be able to justify in the future), and the sense that many of the dwellings built don’t suggest much durability beyond a few decades. In that sense I can’t see them “adapting” to future needs – more likely that they’ll replaced wholesale with something else.

@Dylan – I have to disagree completely about your remarks regarding durability and classic styling that doesn’t date poorly. The old terrace housing that is so popular in Melbourne’s inner suburbs was built because it was the cheap, easy construction method of the time. By the 1940s it was horribly run down and considered dated and inadequate for current housing needs. Indeed the MMBW declared entire blocks slums in the 1950s and simply demolished them in great numbers, replacing them with what are now ironically considered by many to be “slums in the skies”. It was only because of groups like Save Our Suburbs started protesting the clearance of homes that they had restored and were proud of that this action was stopped (and this contributed to the MMBW being dismantled).

When you look at other more recent architectual styles the same is true. 10-20 years ago the though of heritage listing Art-deco buildings was certainly controversial as a lot of people considered the style dated and ugly; now its taken pretty much for granted that many art-deco buildings should be preserved. Now the same process is taking place with buildings of the modernist and brutalist styles.

Ika, obviously much of what was built 80+ years ago wasn’t built well and has been since demolished. But any construction with a) thick solid walls and b) considerable ornamentation (e.g. iron lace-work), such as the most of the buildings that have been preserved from that period could hardly have used the ‘cheap, easy construction method of the time’, which I assume would be closer to wooden shacks! OTOH I’d be very surprised if there’s ever much of a call to preserve a majority of housing stock built post about 1960 (and I would include the 1990 inner-city terrace house I’m in currently, which I’d be extremely surprised to be still standing in 70 or 80 years, on the admittedly unlikely chance I live that long).

There have been several more tipping points leading to gentrification in inner Melbourne. The main one not mentioned in your essay is STATUS. It is now ok to live in Collingwood, Fitzroy, Richmond, Kensington, Brunswick etc., and send the kids to school on the other side of the River. The eye brows are not raised so much anymore in conversations south of the Yarra when families choose to relocate from Kew to Coburg.
Future trends for the moneyed elderly to relocate from Brighton etc to central Melbourne will accelerate as the advantages of PT, walkability, medical services, cultural opportunities, green spaces are being discussed and accepted amongst seniors. After all who wants to be cutting front and back lawns (or paying someone for it) when the MCC provides the beautifully kept, Domain, Royal Park, etc.h

@hk – Surely the status example is an effect of gentrification and not a cause, obviously there would be a bit of a feedback-loop scenario going on (as there always is with anything that is popular), but for the most part I’d say the status came afterwards.

#IkaLink. Many long term Melbourne urban dwellers are very status conscious. The few examples by me are just a starters of the psychometric factors worthy of inclusion in any modelling influencing residential relocation trends past, present and future. Since arriving in Hughesdale in 1951 I have observed more than a few suburbs becoming socially acceptable by the upwardly mobile to relocate to and would consider this attitude change has contributed to gentrification of some inner suburbs not so fashionable in the past.

hk, I’d be inclined to be a little less cynical – there were solid reasons plenty of people would have been wary of moving into many inner-city suburbs 20 or 30 years ago, especially if they were hoping to raise a family. But there was obviously some sort of attraction to the initial gentrifiers, beyond relatively cheap real-estate and proximity to the CBD – I’m not sure anyone has entirely figured out what were the primary triggers. That such suburbs are now some of the most sort after despite high prices for often quite small properties (along with bad traffic) is of course partly, as you say, because they have a certain ‘status’, even if the shops/restaurants/schools/other facilities etc. are not significantly better than those in less-expensive suburbs that offer advantages of their own (particularly if you have little need to travel to the CBD).

Man proceeds in the fog. But when he looks back to judge people of the past, he sees no fog on their path. From his present, which was their faraway future, their path looks perfectly clear to him, good visibility all the way. Looking back, he sees the path, he sees the people proceeding, he sees their mistakes, but not the fog. And yet all of them–Heidegger, Mayakovsky, Aragon, Ezra Pound, Gorky, Gottfried Benn, St.-JohnPerse, Giono–all were walking in fog, and one might wonder: who is more blind? Mayakovsky, who as he wrote his poem on Lenin did not know where Leninism would lead? Or we, who judge him decades later and do not see the fog that enveloped him?

Mayakovsky’s blindness is part of the eternal human condition.

But for us not to see the fog on Mayakovsky’s path is to forget what man is, forget what we ourselves are.